EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "AGREEMENT") dated as of
______________, 2002, is made by and between Westport Resources Corporation, a
Nevada corporation (the "CORPORATION"), and the undersigned director or officer
of the Corporation ("INDEMNITEE").
WHEREAS, the Corporation's amended Articles of Incorporation
(the "ARTICLES") and the Nevada Revised Statutes (as may be amended from time to
time, the "NRS"), under which the Corporation is organized, provide for
indemnification of, or empower the Corporation to indemnify, the Corporation's
directors and officers and persons serving at the request of the Corporation as
a director or officer of another corporation or business entity;
WHEREAS, the Articles and the NRS expressly provide that the
indemnification provisions thereunder are not exclusive;
WHEREAS, such Articles and the NRS contemplate that contracts,
insurance policies and other financial arrangements may be entered into with
respect to indemnification of such directors and officers and other persons;
WHEREAS, the Corporation has purchased and presently maintains
a policy or policies of directors' and officers' liabilities insurance ("D&O
INSURANCE") covering certain liabilities that may be incurred by the
Corporation's directors and officers in the performance of their services to the
Corporation;
WHEREAS, the general availability of D&O Insurance covering
certain liabilities that may be incurred by the Corporation's directors and
officers in the performance of their services to the Corporation and the
applicability, amendment and enforcement of statutory provisions and provisions
of the Articles and Bylaws have raised questions concerning the adequacy and
reliability of the protection afforded directors and officers;
WHEREAS, it is reasonable, prudent and necessary for the
Corporation to obligate itself contractually to indemnify Indemnitee so that
Indemnitee will serve or continue to serve the Corporation free from undue
concern that Indemnitee will not be adequately protected; and
WHEREAS, Indemnitee is willing to serve, continue to serve and
to take on additional service for or on behalf of the Corporation on condition
that Indemnitee be so indemnified;
NOW, THEREFORE, in consideration of the premises and the
covenants contained herein, the Corporation and Indemnitee do hereby covenant
and agree as follows:
1. DEFINITIONS. As used in this Agreement,
(a) "CHANGE IN CONTROL" shall be deemed to have occurred if (i) any
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
1934 Act), other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Corporation or the current beneficial owners or their Affiliates are or
become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of more than one-half of the voting power of the then
outstanding voting stock of the Corporation; or (ii) the stockholders of the
Corporation approve a merger or consolidation of the Corporation with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least a majority of the
combined voting power of the voting securities of the Corporation or such
surviving entity outstanding immediately after such merger or consolidation, or
the stockholders approve a plan of complete liquidation of the Corporation or an
agreement for the sale or disposition by the Corporation of all or substantially
all of the Corporation's assets.
(b) The term "PROCEEDING" shall include any threatened, pending or
completed action, suit, inquiry or proceeding, whether brought by or in the
right of the Corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature, in which Indemnitee was, is or will be
involved as a party, as a witness or otherwise, by reason of the fact that
Indemnitee is or was a director, officer, employee or agent of the Corporation,
by reason of any action taken by Indemnitee or of any inaction on Indemnitee's
part while acting as a director, officer, employee or agent or by reason of the
fact that Indemnitee is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, limited liability company or other enterprise; in each case
whether or not Indemnitee is acting or serving in any such capacity at the time
any liability or expense is incurred for which indemnification or reimbursement
can be provided under this Agreement; provided that any such action, suit or
proceeding which is brought by Indemnitee against the Corporation or directors,
officers, employees or agents of the Corporation or persons serving at the
request of the Corporation as a director or officer of another corporation or
business entity, other than (i) an action brought by Indemnitee to establish or
enforce Indemnitee's rights under this Agreement or any insurance policy or
under the Articles or the Corporation's Bylaws now or hereafter in effect, or
(ii) as otherwise required under the NRS, shall not be deemed a Proceeding
without prior approval by a majority of the Board of Directors of the
Corporation.
(c) The term "EXPENSES" shall include, without limitation, any
judgments, fines and penalties against Indemnitee in connection with a
Proceeding; amounts paid by Indemnitee in settlement of a Proceeding; and all
attorneys' fees and disbursements, accountants' fees, private investigation fees
and disbursements, retainers, court costs, transcript costs, fees of experts,
fees and expenses of witnesses, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other
disbursements, or expenses, reasonably incurred by or for Indemnitee in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in a Proceeding or
establishing Indemnitee's right of entitlement to indemnification for any of the
foregoing.
(d) References to "OTHER ENTERPRISE" shall include employee benefit
plans; references to "FINES" shall include any excise tax assessed with respect
to any employee benefit plan; references to "SERVING AT THE REQUEST OF THE
CORPORATION" shall include any service as a director, officer, trustee,
fiduciary, employee or agent of the Corporation which imposes duties on, or
involves services by, such director, officer, trustee, fiduciary, employee or
agent with respect to
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an employee benefit plan, its participants or beneficiaries; and a person who
acted in good faith and in a manner such person reasonably believed to be in the
interests of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interest of
the Corporation" as referred to in this Agreement.
(e) The term "SUBSTANTIATING DOCUMENTATION" shall mean copies of bills
or invoices for costs incurred by or for Indemnitee, or copies of court or
agency orders or decrees or settlement agreements, as the case may be,
accompanied by a sworn statement from Indemnitee that such bills, invoices,
court or agency orders or decrees or settlement agreements, represent costs or
liabilities meeting the definition of "Expenses" herein.
2. INDEMNITY OF DIRECTOR OR OFFICER. The Corporation hereby
agrees to hold harmless and indemnify Indemnitee, even if such indemnification
is not specifically authorized by the other provisions of this Agreement, the
Articles, the Corporation's Bylaws or by statute, to the fullest extent
authorized or permitted by the provisions of the NRS or such other laws as may
be applicable from time to time, or any change in such law after the date hereof
affecting indemnification rights of Indemnitee (whether by statute or judicial
decision), but only to the extent that such subsequent amendment or change in
such law authorizes or permits the Corporation to provide broader
indemnification rights to Indemnitee than those permitted prior to such
amendment or change in such law, and this Agreement shall be deemed to be
amended to such extent. In the event any change in applicable law narrows the
right of the Corporation to indemnify an Indemnitee, such change, to the extent
not required to be applied to this Agreement, shall have no effect on this
Agreement or the parties' respective rights or obligations hereunder.
(a) GENERAL. Without limiting the generality of the foregoing, the
Corporation shall indemnify, to the maximum extent permitted by the NRS,
Indemnitee if he or she was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation), by reason of the fact that Indemnitee is or was a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that Indemnitee did not act in good faith and in a
manner which Indemnitee reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, have reasonable cause to believe that Indemnitee's conduct was
unlawful.
(b) ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. Without limiting the
generality of the foregoing, the Corporation shall indemnify, to the maximum
extent permitted by the NRS, Indemnitee if he or she was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that Indemnitee is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director or officer of another corporation, partnership, joint venture or trust
or other enterprise, against expenses (including
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attorneys' fees) actually and reasonably incurred by Indemnitee in connection
with the defense or settlement of such action or suit.
3. CHOICE OF COUNSEL. If Indemnitee is not an officer of the
Corporation, Indemnitee, together with the other directors who are not officers
of the Corporation (the "OUTSIDE DIRECTORS"), shall be entitled to employ, and
be reimbursed by the Corporation for the fees and disbursements of, counsel
separate from that chosen by Indemnitees who are officers of the Corporation.
The principal counsel for Outside Directors ("PRINCIPAL COUNSEL") shall be
determined by majority vote of the Outside Directors, and the principal counsel
for the Indemnitees who are not Outside Directors ("SEPARATE COUNSEL") shall be
determined by majority vote of such Indemnitees. The obligation of the
Corporation to reimburse Indemnitee for the fees and disbursements of counsel
hereunder shall not extend to the fees and disbursements of any counsel employed
by Indemnitee other than Principal Counsel or Separate Counsel, as the case may
be, unless, in the opinion of other counsel for Indemnitee, concurred on by
Principal Counsel or Separate Counsel, as the case may be, Indemnitee may have
defenses available to him that are in addition to or different from those of the
other indemnitees such that there is a substantial possibility that Principal
Counsel or Separate Counsel, as the case may be, will have a conflict of
interest in representing Indemnitee.
4. ADVANCES OF EXPENSES. Expenses (other than judgments,
penalties, fines and settlements) incurred by Indemnitee shall be paid by the
Corporation, in advance of the final disposition of the Proceeding, within 10
days after receipt of Indemnitee's written request accompanied by substantiating
documentation and Indemnitee's undertaking to repay such amount to the extent it
is ultimately determined that Indemnitee is not entitled to indemnification. No
objections based on or involving the question whether such charges meet the
definition of "Expenses," including any question regarding the reasonableness of
such Expenses, shall be grounds for failure to advance to such Indemnitee, or to
reimburse such Indemnitee for, the amount claimed within such 10-day period, and
the undertaking of Indemnitee set forth in Section 7 to repay any such amount to
the extent it is ultimately determined that Indemnitee is not entitled to
indemnification shall be deemed to include an undertaking to repay any such
amounts determined not to have met such definition. The Corporation shall make
any advancement of Expenses required hereunder without requesting or requiring
that Indemnitee provide any security in connection with any undertaking by
Indemnitee to repay advanced funds in the event it is ultimately determined that
Indemnitee is not entitled to indemnification, and any such advances made by the
Corporation shall be interest-free.
5. EFFECT OF CHANGE IN CONTROL.
(a) If there has not been a Change in Control after the date of this
Agreement, the determination of (i) the rights of the Indemnitee to
indemnification and/or payment of Expenses under this Agreement or under the
provisions of the Articles, (ii) standard of conduct and (iii) evaluation of the
reasonableness of amounts claimed by the Indemnitee shall be made by a member or
members of the Corporation's Board of Directors or any other person or body
appointed by the Board of Directors, provided however, that such member, person
or body is not party to the Proceeding for which indemnification is sought.
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(b) If there has been a Change in Control after the date of this
Agreement, such determination and evaluation shall be made by a special,
independent counsel who is selected by the Indemnitee and approved by the
Corporation, which approval shall not be unreasonably withheld, and who has not
otherwise performed services for the Indemnitee or the Corporation within the
preceding three years (other than with respect to matters concerning the rights
of any Indemnitee under this Agreement, or of other indemnitees under similar
indemnity agreements). The Corporation agrees to abide by such determination, to
pay the reasonable fees of the such counsel and to fully indemnify such counsel
against any and all reasonable expenses (including attorneys' fees), claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
6. RIGHT OF INDEMNITEE TO INDEMNIFICATION UPON APPLICATION;
PROCEDURE UPON APPLICATION. Any indemnification under this Agreement, other than
pursuant to Section 4, shall be made no later than 45 days after receipt by the
Corporation of the written request of Indemnitee, accompanied by substantiating
documentation.
The right to indemnification or advances as provided by this
Agreement shall be enforceable by Indemnitee in any court of competent
jurisdiction. The burden of proving that indemnification is not appropriate
shall be on the Corporation.
7. UNDERTAKING BY INDEMNITEE. Indemnitee hereby undertakes to
repay to the Corporation any advances of Expenses pursuant to Section 2 to the
extent that it is ultimately determined that Indemnitee is not entitled to
indemnification. Such undertaking by Indemnitee shall be unsecured and the
Corporation shall not be permitted to require Indemnitee to provide any security
for such repayment obligation or to pay any interest on amounts advanced in
accordance with Section 4 hereof.
8. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The
indemnification and advancement of expenses provided by this Agreement shall not
be deemed exclusive of any other rights to which Indemnitee may be entitled
under the Articles, the NRS, D&O Insurance, any agreement, or otherwise, both as
to action in Indemnitee's official capacity and as to action in another capacity
while holding such office. However, Indemnitee shall reimburse the Corporation
for amounts paid to him pursuant to such other rights to the extent such
payments duplicate any payments received pursuant to this Agreement.
9. CONTINUATION OF INDEMNITY. All agreements and obligations
of the Corporation contained herein shall continue during the period Indemnitee
is a director or officer of the Corporation (or is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, limited liability company or
other enterprise) and shall continue thereafter so long as Indemnitee shall be
subject to any possible Proceeding.
10. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under
any provision of this Agreement to indemnification by the Corporation for some
or a portion of Expenses, but not, however, for the total amount thereof, the
Corporation shall nevertheless indemnify Indemnitee for the portion of such
Expenses to which Indemnitee is entitled.
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11. SETTLEMENT OF CLAIMS. The Corporation shall not be liable
to indemnify Indemnitee under this Agreement for any amounts paid in settlement
of any Proceeding effected without the Corporation's written consent. The
Corporation shall not settle any Proceeding in any manner which would impose any
penalty or limitation on Indemnitee without Indemnitee's written consent.
Neither the Corporation nor Indemnitee will unreasonably withhold their consent
to any proposed settlement. The Corporation shall not be liable to indemnify
Indemnitee under this Agreement with regard to any judicial award if the
Corporation was not given a reasonable and timely opportunity, at its expense,
to participate in the defense of such action.
12. SECURITY/FINANCIAL ARRANGEMENTS. To the extent requested
by the Indemnitee and approved by the Corporation (which approval shall not be
unreasonably withheld), the Corporation may from time to time provide security
or other financial arrangements to the Indemnitee for the Corporation's
obligations hereunder through an irrevocable bank line of credit, funded trust,
other collateral or other financial arrangement. Any such security or other
financial arrangement, once provided to the Indemnitee, may not be revoked or
released without the prior written consent of the Indemnitee.
13. ENFORCEMENT; ATTORNEYS' FEES.
(a) The Corporation expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on the Corporation
hereby in order to induce Indemnitee to serve as a director or officer of the
Corporation (or to serve, at the request of the Corporation, as a director or
officer of another corporation, partnership, joint venture, trust or other
enterprise), and acknowledges that Indemnitee is relying upon this Agreement in
continuing as a director or officer.
(b) In the event that any action is instituted by Indemnitee under this
Agreement to enforce or interpret any of the terms hereof, subject to Sections 2
and 7 hereof, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee with respect to such action if Indemnitee is ultimately successful in
such action and shall be entitled to the advancement of Expenses with respect to
such action, unless, as a part of such action, a court of competent jurisdiction
over such action determines that the material assertions made by Indemnitee as a
basis for such action were not made in good faith or were frivolous. In the
event of an action instituted by or in the name of the Corporation under this
Agreement to enforce or interpret any of the terms of this Agreement, subject to
Sections 2 and 7 hereof, Indemnitee shall be entitled to be paid all Expenses
incurred by Indemnitee in defense of such action (including costs and expenses
incurred with respect to Indemnitee counterclaims and cross-claims made in such
action) and shall be entitled to the advancement of Expenses with respect to
such action, unless, as a part of such action, a court having jurisdiction over
such action determines that Indemnitee's material defenses to such action were
not made in good faith or were frivolous.
14. MAINTENANCE OF D&O INSURANCE. The Corporation hereby
covenants and agrees that, so long as the Indemnitee shall continue to serve as
an officer or director of the Corporation and thereafter so long as the
Indemnitee shall be subject to any possible Proceeding by reason of the fact
that the Indemnitee was an officer or director of the Corporation or is or was
serving at the request of the Corporation as a director or officer of another
corporation,
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partnership, joint venture, trust or other enterprise, the Corporation shall
maintain in full force and effect D&O Insurance in reasonable amounts from
established and reputable insurers.
15. GOVERNING LAW; BINDING EFFECT; AMENDMENT AND TERMINATION;
ENTIRE AGREEMENT.
(a) This Agreement shall be interpreted and enforced in accordance with
the laws of the State of Nevada.
(b) This Agreement shall be binding upon the Corporation, its
successors and assigns, and shall inure to the benefit of Indemnitee,
Indemnitee's heirs, personal representatives and assigns and to the benefit of
the Corporation, its successors and assigns.
(c) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by the Corporation and
Indemnitee.
(d) This Agreement represents the entire agreement between the
Corporation and Indemnitee regarding the subject matter hereof and supersedes
any previous indemnification agreement between Indemnitee and the Corporation or
any predecessor corporation or other affiliate.
16. SEVERABILITY. If any provision of this Agreement shall be
held to be invalid, illegal or unenforceable (a) the validity, legality and
enforceability of the remaining provisions of this Agreement shall not be in any
way affected or impaired thereby, and (b) to the fullest extent possible, the
provisions of this Agreement shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or unenforceable. Each
section of this Agreement is a separate and independent portion of this
Agreement. If the indemnification to which Indemnitee is entitled with respect
to any aspect of any claim varies between two or more sections of this
Agreement, that section providing the most comprehensive indemnification shall
apply.
17. NOTICE. Notice to the Corporation shall be directed to
Westport Resources Corporation, 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx
00000, Attention: Chief Executive Officer. Notice to Indemnitee shall be
directed to the address set forth under Indemnitee's signature hereto. The
foregoing addresses may be changed from time to time by the addressee upon
notice to the other parties. Notice shall be deemed received three days after
the date postmarked if sent by prepaid mail, properly addressed.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on and as of the day and year first above written.
WESTPORT RESOURCES CORPORATION
By:
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Name:
Title:
INDEMNITEE
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Name:
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Address:
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